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the plan is just not pay the credit cards until they are willing to finally settle with me. my credit score is horrible right now and the family is buckling under the pressure of the debt. paying a little each month, which we are currently doing is getting us no where except broke. my debt is 35,000$ i figure i can have it all paid off in 30 months by settling.
my question, will this work? how will settling work on my fico. how long before i have good credit again?
Debt settlement will probably make your FICO score even worse and you may get ripped off in the process.
If you havent done so, you need to cut your lifestyle to the bare minimum (2nd job?, sell stuff) and then detrmine how much money you have to put on your debt. You might want to check into a DMP program which would have your debt paid off in 5 years and not harm your credit like a debt settlment program would. I used a DMP program to pay down my debt but you have to be able to make the payments.
In terms of when will you have good credit again, that depends on what your proifle is now and what you do to get out of debt. You can always rebuild it after you get of of debt. It will take time but it will happen. Took me over 5 years to get out of debt and I'm still working on my FICO scores.
this question is to Marty56 - what is a DMP program and what is a good one to contact?
This second person then told me I qualified and they would be sending me by mail a form to list all my credit cards and they would lower my interest rates for all my cards.
I then asked them how they made their money and he said I would be charged $995 on this one credit card which of course would take me almost to my credit limit of $7000.00 so I asked if I could call them back in a week that I was not ready to make that decision. Of course he talked and talked and tried to convince me to do this and then he was able to lower the cost to me to $795.00 and I still declined He still tried to convince me to this today but after he said he would have to call the banks and tell them I declined the offer I asked why and he asked me to hold on and he would connect me and we got disconnected. He tried to call me back but I didn't answer the phone anymore (I have caller id)
Would it help me to do such a thing, that is to lower my credit card interest rates? He was promising 3% or lower interest rates for life because of my long credit history with this particular card, even on new purchases I realize the seriousness of almost maxing out my credit limits. Currently I owe $23,000 on five different credit cards. I haven't paid my January rent yet, my landlord has a judgement against me of non payment of rent. I had lost my job in December of 2007 just a year and half after my husband died due to a work related injury. I have a Worker's Compensation Claim in and the next hearing is scheduled for 2/2/09 but WC has only paid me through August of 2008 and these past four months without working I have had to use my credit cards to pay utilities and rent. Workers Compensation works very slowly. I do have a lawyer but it seems there is nothing he can do to speed things up either.
So I know I have asked a lot of questions here but if you could answer some of them I would greatly appreciate it.
Sounds like they are trying to rip you off. A DMP program is a Debt Managment Program. They work with al your creditors to reduce (in most cases) your interest rates and eliminate the over limit fees and late fees.
You pay the DMP company 1 big payment and they pay your creditors. The CCs that you place into the program would be closed and you agree not to open any new credit accounts while in the program Since you pay back the entire principle (and even interest in most cases), it wont harm your credit in the long term.
They only evidenceon your CR that you were in a DMP was a TL stating that the account was managed by a CCCS. Since DMP I got a prime autoloan and Visa card so as far as I can tell, those TL's didnt affect my ability to get credit.
Most DMP programs last 3 to 5 years (mine was 4.7 years). There is no up front charge and they charge a monthly fee to manage your accounts.
I sent you a PM with the company I used. I paid $40 a month for them to manage my accounts.
@Anonymous wrote:He was promising 3% or lower interest rates for life because of my long credit history with this particular card, even on new purchases
No one outside the CCC could do that and IMHO even the CCC wouldnt either. DMP will fix the interest rate for the life of the DMP but you cant use the card. Scam big time.
Under NO circumstance should you do business with that company. The dmp company I used got BofA to reduce my interest rate to 4% cc and 13# loc. I pay them approximately $15 per month, but it was negotiable.
The original contract cost was $35.00. They handle everything, but I check every statement to make sure everything is fine. I'm now in Year 3, planning on being finished in one year, a year early.
Keep an emergency card out for yourself to use, the rest will be closed.
You have the option of not paying on your cards, but you will be living a nightmare. Some creditors will sue you, and put a lien on your home or garnish your wages.
Is a bankruptcy an option worth looking at? What's MOST important here is keeping your family fed, housed, clothed.
If you stop paying, it will be years before you have decent credit. BK7 or BK13 may be the right option for you.
Well I don't want to do bankruptcy, did that in 2001 and that will finally be off by 2010, I am current with all my bills at this point. Just waiting for the Worker Comp claim to settle. Hopefully on 2/2/09. Cannot work at this time my arms are suffering terribly from the herniated discs from the injury. Just got to play their doctor games I guess.
But now I am totally out of any savings only IRS's left and the messy economy has halved their values, didn't have that much to begin with but now only worth about $4K Current credit score with Transunion is 674, had been 750 but one of the credit cards reduced my credit limit from 5000 to 300 in one month last October, did owe anything to them but that is what reduced my score, now another cred card reducedfrom 5000 to 3500 right after I had brought the amount I owed to 3500 so I guess I will see whet that will do, that just happened this month.
Just paying utilities half of what I owe, at least they only charge late fees no interest. And for the last year or so I have been paying twice the minimum that is due. Can't do that this month.
But thanks for the advice about the Credit Card Services that called me today. I will tell them to take a hike. Why do you think they siad they had to call the banks? This is when I hung up. Do thye really have to do that "tell them I turned down the offer." is what he said to me.
IMHO, you can call each creditor yourself. You dont need to pay a third party to do that for you.
While I dont summarily dismiss the benefit of DMPs for some conumers, I see nothing they can do that I cannot do myself.
They dont reduce your debt, they just negotiate to lengthen payment times, which, even if they secure a lower interest rate, does not reduce current debt. More interest, and thus debt, accrues.
@RobertEG wrote:While I dont summarily dismiss the benefit of DMPs for some conumers, I see nothing they can do that I cannot do myself.
I agree credit wise altough these days I would defy someone to get a CCC lower your interest rate. The DMP program forced me to get out of the credit card debt cycle because it stoped me from using them and keeping them maxed out. It also forced my to make and keep a budget.
They final piece in Marty's trinity of keeping out of CC debt was to become a member of this forum and be OCD about my credit score.